Tuesday, February 25, 2020

Expected Dividend Increases for March 2020

As I'm writing this post, the Milwaukee Bucks are fresh off their 126-106 drubbing of the Detroit Pistons in Detroit, and are scheduled to play later tonight against the Philadelphia 76ers in Milwaukee.

As a testament to the Bucks' dominance all season long, they have a chance to clinch a playoff spot earlier in the regular season than any other team in NBA history. The Golden State Warriors became the earliest NBA team in history to clinch a playoff spot in 2017, doing so on February 25.

At 47-8, the Bucks are 26.5 games better than the 9th place team in the Eastern Conference, the Washington Wizards. The Wizards are 20-34, with 28 games to play.

A Bucks' win over the 76ers tonight and a Washington Wizards loss on February 23 against the Chicago Bulls are the required outcomes to formally clinch a playoff spot.

If things don't go the Bucks' way in the two games above, Milwaukee would still have a chance to clinch its playoff spot in a head to head match-up against the Wizards on February 24 (which is almost sure to result in a Bucks' win given that the Giannis-less Bucks managed to beat the Wizards by 20 last month as a result of Khris Middleton's 51 point outburst).

With that piece of Bucks excitement out of the way, let's delve into the actual intent of this blog post, which is to outline the dividend increases that I have received in the month of February and the increases that I expect to receive in March now that February is a few days from ending.

Increase #1: PPL Corp (PPL)

PPL Corp announced a 0.6% increase in its quarterly dividend from $0.4125/share to $0.4150/share, which was slightly below my expectation of $0.4175/share as outlined in my previous post of this series.

Even though PPL's dividend increase was below my expectation, I don't expect high yielding utilities such as PPL to offer dividend increases beyond the low-single digits, so the increase was still a welcomed one in my opinion.

Across my 8 shares, PPL's dividend increase boosted my annual forward dividends by $0.08.

Increase #2: Genuine Parts Company (GPC)

Genuine Parts Company announced a 3.6% increase in its quarterly dividend from $0.7625/share to $0.7900/share, which was once again a bit below my expectation of a 5-7% dividend increase.

Given that 2020 is fraught with political uncertainty and we're well over a decade into a phase of economic expansion, I can understand GPC's caution in dividend increases.

After all, a company doesn't become a Dividend King by overextending itself with too generous of dividend increases only to be forced to cut its dividend when the economy takes an inevitable downturn. GPC remains a well run and somewhat recession resistant company, which is precisely why I own it.

Across the 3 shares that I own, GPC's dividend increase added $0.33 to my annual forward dividends.

Increase #3: Prudential Financial (PRU)

Prudential Financial announced a 10% increase in its quarterly dividend from $1.00/share to $1.10/share, which was slightly higher than the 9% increase that I was expecting from the company.

Given that I acquired shares of PRU near their 52 week low last August, I have been incredibly pleased with this purchase. Purchasing a company with a 5.13% yield to see it surge 18% and deliver a 10% dividend increase all in less than 6 months is about as good as it gets IMO.

Across my 3 shares, PRU's dividend increase boosted my annual forward dividends by $1.20.

Increase #4: The Home Depot (HD)

The Home Depot announced a 10.3% increase in its quarterly dividend from $1.36/share to $1.50/share.

While this was quite a bit below my initial expectation of a 17.6% increase in the quarterly dividend to $1.60/share, I fully understand why HD would elect to remain cautious with its dividend increase.

With news that the coronavirus could potentially have a materially adverse impact on the global economy if the virus isn't contained and eradicated very soon, HD is completely justified in the conservative management of its dividend increase for 2020.

Increase #5: Digital Realty Trust (DLR)

While Digital Realty's dividend 3.7% dividend increase in its quarterly dividend from $1.08/share to $1.12/share was below my expectation of 6.5% and $1.15/share, I understand why DLR was cautious with its increase.

The InterXion acquisition along with the uncertain outlook of the coronavirus were likely the primary factors in DLR's decision to be conservative with its dividend increase.

Across my 3 shares, my annual forward dividends were boosted by $0.48.

Increase #6: Albemarle (ALB)

While Albemarle's 4.8% quarterly dividend increase from $0.3675/share to $0.3850/share was below my expectation, I believe ALB's conservatism will pay off in the long run.

ALB is focused on aggressively investing for future growth, so I'm entirely fine with a few smaller raises the next few years in exchange for larger increases later down the line.

Across my 5 shares, my annual forward dividends increases by $0.35.

A Dividend Surprise

Simon Property Group (SPG): Although I was expecting SPG to increase its dividend in February as it has done for the past several years, the company understandably elected to keep the quarterly dividend at $2.10/share as a result of its recently announced joint venture with Authentic Brands Group and Brookfield Property Partners to acquire Forever 21, not to mention the acquisition of the 80% stake in Taubman Group (TCO) for $3.6 billion.

While SPG's balance sheet still remains in decent shape following its acquisition activity as of late and it could have easily afforded the dividend increase that I was expecting, I have no problem with the company's tendencies toward fiscal conservatism as that is one of the qualities, along with a proven management team that makes the company a blue-chip REIT.

Expected Dividend Increases for March 2020:

Expected Dividend Increase #1: Realty Income (O)

Realty Income has been a model of consistency among not just REITs, but the dividend growth stock universe in general. Since I initiated a position in 2018, the company has yet to really surprise me in terms of its dividend announcements, and that's a great thing.

I expect March to be no different, with O raising its monthly dividend 0.2% from $0.2325/share to $0.2330/share.

Across the 4 shares that I own, this would result in a $0.024 increase in my annual forward dividends.

Expected Dividend Increase #2: WP Carey (WPC)

Sticking with the theme of reliable REITs within my portfolio, WP Carey has been an equal to O in terms of consistency.

I have yet to really be that surprised by WPC's dividend announcements in the 2 years that I've owned the company, which is just what a DGIer loves.

I expect WPC to announce a 0.2% increase in the quarterly dividend from $1.038/share to $1.0400/share, which would increase my annual forward dividend income by $0.024 across my 3 shares.

Expected Dividend Increase #3: Williams Sonoma (WSM)

Given that Williams Sonoma's payout ratio is in a good place and that the company is poised to continue its momentum into 2020, I fully expect WSM to announce a 10.4% increase in the quarterly dividend from $0.48/share to $0.53/share.

Across the 6 shares of WSM that I own, this would boost my annual forward dividends by $1.20.

Expected Dividend Increase #4: General Dynamics (GD)

Since General Dynamics' payout ratio is also in a nice range, I expect that the company will announce a dividend increase similar to last year's 9.7% increase, which would bring the company's quarterly dividend from $1.02/share to $1.12/share.

Across my 2 shares of GD, this would result in a $0.80 increase in my annual forward dividend income.

Concluding Thoughts:

February was full of surprises, which was manifested in the slightly lower than expected dividend increases from PPL, GPC, and ALB.

Fortunately, PRU's dividend increase slightly exceeded my expectations and offset much of the difference in PPL, GPC, and ALB's actual dividend increases versus their expected increases.

SPG's acquisition activity in the month of February accounted for the lack of a dividend increase, which is something I'm perfectly fine with given the company's proven track record of fiscal conservatism and delivering results for its shareholders over the long-term.

I have received $3.00 in dividend increases. This would take a fresh capital investment of $75.00 at a yield of 4% to replicate.

I am expecting March 2020 to produce $2.048 in dividend increases, which would require a fresh capital investment of $51.20 to replicate at a 4% yield.

Overall, the portfolio is continuing to make progress and advance in the right direction. As this post is published, my annual forward dividends are closing in on the $1,000 mark, with about $55 to go.

Since I am in the process of paying for my first car, gathering funds to pay my tax liability for 2019 (when I needed to estimate my income for 2019 in December 2018 for marketplace insurance subsidy purposes, I hadn't yet contributed for Seeking Alpha and ended up making about $6,000 more than I anticipated), and building an emergency fund, I expect March to be a quiet month in terms of capital deployment aside from the usual retirement contributions.

April is slated to be about as quiet as March, with May's non-retirement contributions likely to be around $500, and the rest of the year returning to the typical $1,000-$1,500/month non-retirement contributions.

Therefore, I'm not expecting to reach the $1,000 annual forward dividend mark until May of this year.


How did your February fare in terms of actual dividend increases versus expected dividend increases?

Were there any pleasant or unpleasant surprises on your end as far as dividend increases were concerned?

Is this March shaping up to be busier than last year's March in terms of both the dollar amount and volume of dividend increases?

As always, I appreciate your readership and I look forward to replying to any comments that you are welcome to leave in the comment section below!


  1. Such a great post. I love passive income investment because it has got more advantages compared to disadvantages. Dividends are cool.

  2. Thanks for commenting and I'm glad you enjoyed the post. Dividends and passive income in general are most definitely cool!